The Financial Conduct Authority (FCA) has announced that it has reached an agreement with Card Protection Plan Limited (CPP) and 13 high street banks and credit card issuers that will pave the way for redress to be paid to customers who were mis-sold CPP’s Card Protection and Identity Protection policies.
According to the FCA seven million customers, who between them bought and renewed about 23 million policies, could collectively receive redress of up to £1.3bn with redress per customer depending on the type of policy (or policies) owned and the length of time it was held. The agreement is subject to court approval.
The insurance products, ‘Card Protection’, which cost approximately £30 per year and ‘Identity Protection’, which cost approximately £80 per year were widely mis-sold by CPP, resulting in a £10.5m fine in November 2012.
Customers were given misleading and unclear information about the policies so that they bought cover that either was not needed, or to cover risks that had been greatly exaggerated. As well as CPP selling directly to customers, high street banks and credit card issuers introduced millions of customers to CPP.
